PEWAUKEE — Thousands of tax dollars are on the line for Pewaukee residents as Walgreens pursues a major reassement of their property at 1441 Capitol Drive.
Walgreens believes the fair market value of their property should be approximately $2 million, which is a reduction of $1,588,500, or 44.2 percent, of their 2018 assessed value.
On Thursday night, the Pewaukee Village Board disallowed Walgreens Company’s “Claim of Excessive Assessment,” which means the taxpayers’ dollar is safe for now.
However, if the tax reassement were granted, the village of Pewaukee would lose $8,147, the Pewaukee School District would lose $15,574, Waukesha County Technical College would lose $595 and Waukesha County would lose $3,108.
Walgreens did not respond to a Freeman reporter’s request for comment. At this point, Walgreens has not indicated what steps, if any, they’ll take to pursue the reassement. However, Village Trustee Ed Hill said they do have the option to go after the reassement through the court system. “I see it as a potential obstacle that we’re going to have to make a decision on if they do pursue the lawsuit and a claim,” said Hill.
“Do we defend it or do we settle? That’s another decision that we as a board will have to make.” This exact scenario, known as the “Dark Store Theory,” has played out in many communities across Wisconsin.
According to the League of Wisconsin Municipalities, attorneys for big box stores use the dark store loophole to argue that the value of a new store in a busy commercial district should be based on the value of former retail properties in unpopular areas that are now closed and vacant.
Backed by a 2008 Wisconsin Supreme Court Decision, Walgreens v. City of Madison, big box stores have been successful in having their properties reassessed at less than half of the actual recent sale prices of such properties.
Now municipal and other officials are concerned since the tax burden is being shifted to the homeowner. Hill, who views the whole situation as unfair, said not a lot can be trimmed from the operating costs of WCTC, local government and schools. “The end result is often that businesses and homeowners have to pick up the difference in that tax revenue,” Hill said.
The Wisconsin Legislature does have the power to close the loopholes. In fact, the Legislature had the opportunity to close the loopholes in 2018 but failed to do so despite broad support among legislators. Now some local officials, including Hill, are asking residents to reach out to State of Wisconsin representatives in the Senate and Assembly to tell them to close the “Dark Store Loopholes.”